Inventory and Capitalized Interest

12 Months Ended

Dec. 31, 2023

Inventory

A summary of the Company’s inventory as of December 31, 2023 and 2022 is as follows:


	December 31,
(In thousands)	2023		2022
Single-family lots, land and land development costs	$	1,446,576	$	1,294,779
Land held for sale	6,932		3,331
Homes under construction	1,177,101		1,366,804
Model homes and furnishings - at cost (less accumulated depreciation: December 31, 2023 - $10,940; December 31, 2022 - $10,371)	68,696		61,200
Community development district infrastructure	19,339		29,701
Land purchase deposits	51,608		55,739
Consolidated inventory not owned	26,899		17,048
Total inventory	$	2,797,151	$	2,828,602

Single-family lots, land and land development costs include raw land that the Company has purchased to develop into lots, costs incurred to develop the raw land into lots, and lots for which development has been completed, but which have not yet been used to start construction of a home.

Homes under construction include homes that are in various stages of construction. As of December 31, 2023 and 2022, we had 2,023 homes (with a carrying value of $424.2 million) and 1,827 homes (with a carrying value of $431.7 million), respectively, included in homes under construction that were not subject to a sales contract.

Model homes and furnishings include homes that are under construction or have been completed and are being used as sales models. The amount also includes the net book value of furnishings included in our model homes. Depreciation on model home furnishings is recorded using an accelerated method over the estimated useful life of the assets, which is typically three years.

The Company assesses inventory for recoverability on a quarterly basis. See Notes 1 and 3 to our Consolidated Financial Statements for additional details relating to our procedures for evaluating our inventories for impairment.

Land purchase deposits include both refundable and non-refundable amounts paid to third party sellers relating to the purchase of land. On an ongoing basis, the Company evaluates the land option agreements relating to the land purchase deposits. The Company expenses any deposits and accumulated pre-acquisition costs relating to such agreements in the period when the Company makes the decision not to proceed with the purchase of land under an agreement.

Capitalized Interest

The Company capitalizes interest during land development and home construction. Capitalized interest is charged to land and housing costs and expensed as the related inventory is delivered to a third party. The summary of capitalized interest for the years ended December 31, 2023, 2022 and 2021 is as follows:


	Year Ended December 31,
(In thousands)	2023		2022		2021
Capitalized interest, beginning of period	$	29,625	$	24,343	$	21,329
Interest capitalized to inventory	35,845		35,552		36,843
Capitalized interest charged to land and housing costs and expenses	(33,326)		(30,270)		(33,829)
Capitalized interest, end of period	$	32,144	$	29,625	$	24,343

Interest incurred	$	15,823	$	37,802	$	38,999